Today's Question: Should Missouri adopt a consumption tax?

Tuesday, May 19, 2009 | 2:41 p.m. CDT

As an alternative to income tax, the idea of adopting a consumption tax has become a national movement, with Missouri at the front.

Consumption tax is a tax on what people spend, as opposed to what people earn. Supporters refer to the idea as the "fair tax."

And according to Colin Malaker, a fair tax advocate for the 9th Congressional District, "everyone’s eyes are on Missouri right now," anticipating that the state will eliminate the income tax and create the consumption tax.

The campaign lobbying for a consumption tax in Missouri said it's a grassroots movement.

“Its popularity is due mostly to word of mouth, grassroots work,” said John Putnam, co-director of Fair Tax for Missouri. “Presentations at civic groups like Rotary or the Kiwanis Club have done more for it than national figures.”

In January, Rep. Chris Kelly, D-Columbia, joined Rep. Ed Emery, R-Lamar, and other Republicans in the push for the consumption tax.

Emery’s work has taken three years to get through the Missouri House. It might take another three years to get through the Senate and to the public ballot, two years after Emery becomes term-limited in 2011, but it's gaining momentum.

Putnam said though the movement has started small, it's picking up speed.

“We’re gaining on this,” Putnam said, adding that the Missouri chapter of Fair Tax for America has more than 20,000 members, including more than 300 in Columbia.

What are the advantages or disadvantages of a consumption tax?

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Christopher Foote May 19, 2009 | 3:20 p.m.

A consumption tax is an excellent idea. In order to not burden the poor, however, food and public transportation should not be taxed. I would define food as any edible commodity that contains only one ingredient. This would include all fruits and vegetables as well as meats, and it would exclude all processed or value added "foods". I would doubly tax all food that contains high fructose corn syrup or any other waste products generated by the agriculture-industrial complex.

(Report Comment)
John Schultz May 19, 2009 | 7:04 p.m.

If the proposed bill mirrors the national effort, there is a monthly "prebate" check that covers all expenditures up to the federal poverty level. Making foodstuffs free of sales tax would cause a higher tax rate on other items, as well as begin the sales tax exemptions games that currently infest the income tax.

(Report Comment)
John McDaniel May 20, 2009 | 4:06 p.m.

I have this to say in defense of the FAIR TAX, HR 25 / S 296............................

We here in Texas have a state sales tax and it has resulted in NONE! of the dire predictions some have foreseen. There has been no scandal, corruption, or cheating in relation to it. It has funded our state government SPLENDIDLY! We Texans, tourists, illegal aliens, criminals, etc. are all in INSTANT COMPLIANCE!! every time we go through the "cash-register-check-out-line". Virtually no one escapes paying. If it works for Texas it will work for the nation.

THINK ABOUT IT MORE...................................................

Read and Enjoy..................................................

APRIL 15TH????? Let's make it just another Spring day.

HR 25, the Fair Tax Act, is in the House Ways and Means Committee of
congress, waiting to be passed into law. If passed, the Income Tax &
IRS would be abolished and replaced with a national (retail only) sales

Everyone shoud go to: and tell their congressmen that
they want HR 25 passed into law ASAP!!!! If we all "push together", we
can make it happen. There's nothing to it, BUT TO DO IT!!!!!!


22% of the price of all that you buy currently is tax / tax compliance cost. When that cost goes away (under the Fair Tax) the price of your $1.00 item (purchased at Wal-Mart, for example) drops in price to 78 cents (without damaging the profit margin).

1.23 X 78 cents = 96 cents.

Seeeeeeeeeeeeeeee!!!! Even with the 23% Fair Tax added on, your originally $1.00 item is now 4 cents cheaper.

The "out-of-pocket" cost of living , under the Fair Tax , will be no more than it is now.

Under the Fair Tax there are NO LOSERS, only winners, the difference being that some win BIGGER!!!! than others due to their increased FRUGALITY.

Best Regards,
John Paul McDaniel

Go to:

(Report Comment)
Christopher Foote May 20, 2009 | 4:46 p.m.

"22% of the price of all that you buy currently is tax / tax compliance cost"
This number is dubious, got any references?
The current combined (state + county + city) sales tax in Columbia Missouri is 7.55%.
Also the Fair Tax group has a funny way of computing the tax rate.
They like to say that it is a 23% inclusive rate.
So if an item costs $1.00 and you pay an additional .30 in taxes this is a 23% rate because .30/1.30 = 23%.
For the rest of us who don't need to con people we call that a 30% tax rate.
If you don't believe me try calculating the Fair Tax rate on an item without using 30%.

(Report Comment)
John McDaniel May 24, 2009 | 2:57 p.m.

AT Heist & all,

Either way you choose to compute the Fair Tax, it is the same ammount being taxed.

"22% of the price of all that you buy is tax / tax compliance cost,"

The "reference" for this figure is

Over $20 million worth of scholarly research derived the 22% figure.

(Report Comment)

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